Modification of Agreement

RNS Number:9241G
Provalis PLC
3 February 2003


For Immediate Release                                         3rd February 2003


         Provalis Agrees Modification of Agreement with Dr Falk Pharma

                      in Return for Payment of #5 million

Provalis plc (LSE:PRO and NASDAQ:PVLS) is pleased to announce that it is to
receive up to #5 million for agreeing to the modification of one of its
distribution agreements. This ties in with Provalis' stated strategy of reducing
its reliance on products owned by third parties, and replacing them with
products owned by Provalis.

Provalis has modified its distribution agreement with Dr Falk Pharma GmbH (Dr
Falk), a specialist developer of gastro-intestinal products, under which
Provalis exclusively sells the Dr Falk range of products in the UK. Over its
last three financial years, Provalis' average annual sales of the Dr Falk
products have been #2.2 million, and anticipated sales for the current financial
year are circa #2.5 million.

Under the existing agreement, Provalis had the rights to sell the Dr Falk
products until March 2010. Provalis has now:-

1.      Agreed that the agreement shall terminate early on 31st December 2004. 
In compensation for this, Provalis will be paid up to #4.5 million in cash in 
the following instalments:-

*       #1.0 million payable in February 2003;
*       #1.5 million payable in January 2004; and
*       #2.0 million payable in January 2005, subject to a proportionate
        reduction in the event that Provalis' sales of the Dr Falk products 
        during calendar year 2004 fall below #2.5m.

Provalis will continue to sell the Dr Falk products until 31st December 2004.

2.               Entered into a second agreement with Dr Falk under which
Provalis agrees that it shall not sell any product which competes with any of
the Dr Falk products in the UK or the Republic of Ireland before 1st January
2007. In consideration for this, Provalis will be paid a further #0.5 million,
also in February 2003.

3.               Ratified the extension of the agreement to include the Republic
of Ireland (until 31st December 2004), where the Dr Falk products have
previously been sold by another distributor for a number of years.

Commenting on the revised agreement, Phil Gould, Chief Executive of Provalis,
said, "This deal with Dr Falk achieves a number of objectives for Provalis. The
cash payments maintain our drive towards financial self sufficiency as the sales
of our key products Diclomax and Glycosal continue to grow."

"Also, now that we are selling the established range of Dr Falk products in
Ireland, we have the springboard for the launch of our other pharmaceutical
products, in particular Diclomax, onto that market."

                                      END


Provalis' Internet Website ; http://www.provalis.com

"Safe Harbor" Statement under the US Private Securities Litigation Reform Act of
1995: Statements in this announcement that relate to future plans, expectations,
events, performances and the like are forward-looking statements as defined in
the US Private Securities Litigation Reform Act of 1995. Actual results of
events could differ materially from those described in the forward-looking
statements due to a variety of factors.  Such factors include, among others: the
rate at which operating losses are incurred; the rate of net cash utilisation
within the Group and, hence, the Group's possible need for additional capital in
the short, medium and/or long term; the execution of development, licensing,
research, manufacturing and other collaboration agreements with third parties;
the progress of the Group's continuing research and development activities;
uncertainties related to future trial results and the viability of the Group's
products, which are at various stages of development; the generation of
sufficient operating cash flow by the Group's healthcare and medical diagnostics
divisions to finance the ongoing development of these businesses as well as the
Group's research and development activities; the impact of future laws,
regulations and policies; availability and level of reimbursement for the
Group's products from government health administration authorities or other
third-party payors; the Group's intellectual property position and the success
of patent applications for its products and technologies; stock market trends in
the Group's sector; the Group's dependence on key personnel; general business
and economic conditions; and other factors beyond the Group's control that may
cause the Group's available capital resources to be used more quickly than
expected.  These and other factors that could affect the Company's future
results are more fully described in its filings with the US Securities and
Exchange Commission, in particular the latest 20-F filing, copies of which are
available from the Company Secretary at the Company's registered address.

For further information:-

Dr Phil Gould, Provalis plc,  Tel:  01244 833463
Mr Lee Greenbury, Provalis plc,  Tel:  01244 833402
Lisa Baderoon, Buchanan Communications,  Tel:  020 7466 5000

Notes to Editors

Provalis plc (LSE:PRO and NASDAQ:PVLS) is a pharmaceutical company with two
operating divisions:-

*       Medical Diagnostics - develops and sells to world markets medical
diagnostic products for chronic disease management.  The division's principle
products are Glycosal and Osteosal in the areas of diabetes and osteoporosis
respectively.

*       Healthcare - sells and markets its own, and third party, branded,
prescription medicines in the UK to GPs and hospitals through its own regionally
managed sales force.  The division's principle product is Diclomax, a medicine
for use in the treatment of musculo-skeletal disorders, and it also sells
products in the areas of gastroenterology, osteoporosis, migraine and
dermatology.


                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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